The Alberta fuel tax has a base rate of 13 cents per litre on gasoline and diesel, but the rate you actually pay at the pump changes every three months based on the price of oil. Under the province’s Fuel Tax Relief Program, the rate can fall as low as zero when West Texas Intermediate crude climbs high enough. Federal excise tax normally stacks on top, though it is temporarily suspended through part of 2026. Farmers, off-road users, and interprovincial carriers each have their own rules.
How the Quarterly Rate Changes
Alberta recalculates the fuel tax rate on January 1, April 1, July 1, and October 1 of each year. The trigger is the average price of a barrel of West Texas Intermediate (WTI) oil over the 20 trading days before the 16th of the month immediately preceding the new quarter.1Alberta.ca. Tax, Levy, and Prescribed Interest Rates
The tiers work like this:
- WTI at $90 USD or higher: 0 cents per litre
- WTI between $85 and $89.99 USD: 4.5 cents per litre
- WTI between $80 and $84.99 USD: 9 cents per litre
- WTI below $80 USD: the full 13 cents per litre
One guardrail: the rate cannot rise by more than 9 cents per litre in a single quarter, so a sudden drop in oil prices cannot swing the tax from zero back to 13 cents overnight.1Alberta.ca. Tax, Levy, and Prescribed Interest Rates Because the rate moves with oil prices, the number that applies when you fill up may differ from the 13-cent base. The province publishes the current figure at the start of each quarter on its Tax, Levy, and Prescribed Interest Rates page.
Which Fuels Are Taxed
The quarterly rate applies to clear gasoline, clear diesel, and related fuels including ethanol, biodiesel, bunker fuel, kerosene, methanol, and condensate when used to power an engine. Propane is taxed when used as motive fuel in a motor vehicle. Aviation fuel and locomotive fuel each have their own reporting rules.2Alberta.ca. Fuel Tax – Overview
Marked fuel, sometimes called dyed or purple fuel, is taxed at a flat 4 cents per litre instead of the variable rate. It is meant for off-road and industrial uses: unlicensed equipment, building heat, farming. You are not allowed to put it in a licensed road vehicle.2Alberta.ca. Fuel Tax – Overview
Penalties for Misusing Marked Fuel
Using purple fuel in a highway vehicle is one of the most common fuel tax offences in the province, and inspectors check for it. If you are caught, you owe the difference between the marked-fuel rate and the clear-fuel rate on every litre used, plus a penalty of 50 percent of that assessed amount.3Government of Alberta. Fuel Tax Act Special Notice Vol. 1 No. 23
It is also a provincial offence. A first-time consumer conviction can bring a fine of up to $1,000. Later offences can reach $5,000 and up to six months’ imprisonment. Vendors who sell marked fuel to ineligible buyers face up to $10,000 and six months for a first offence, and up to $25,000 and a year for repeat violations. Vendor and buyer are jointly liable for the unpaid tax.3Government of Alberta. Fuel Tax Act Special Notice Vol. 1 No. 23
Federal Fuel Taxes in Alberta
The federal excise tax on fuel is normally 10 cents per litre on gasoline and 4 cents per litre on diesel. From April 20, 2026 through September 7, 2026, that tax has been temporarily suspended and set to zero. The full rate is scheduled to return on September 8, 2026.4Government of Canada. Temporary Suspension of the Federal Fuel Excise Tax During the suspension, drivers in Alberta pay only the provincial fuel tax at its current quarterly rate.
The federal fuel charge under the carbon pricing system no longer applies at all. Ottawa set all fuel charge rates to zero on March 15, 2025, and Bill C-4 received royal assent on March 12, 2026, removing the charge permanently. No fuel charge is owed on any activity after March 31, 2025, and Canada Carbon Rebate payments ended after April 2025.5Government of Canada. Fuel Charge Rates
How the Tax Reaches You
Consumers do not file a fuel tax return. Alberta collects the tax upstream from refiners and large wholesalers designated as full direct remitters. They report their fuel transactions monthly and remit the tax to Tax and Revenue Administration (TRA), then recover it by building it into the price they charge the next buyer down the chain.2Alberta.ca. Fuel Tax – Overview By the time fuel reaches a service station, the tax is already inside the posted price per litre.
Exemptions and Rebates
Alberta Farm Fuel Benefit
The Alberta Farm Fuel Benefit (AFFB) gives eligible agricultural producers a 9-cent-per-litre exemption on dyed gasoline and diesel, which brings their effective rate down to the 4-cent marked-fuel level. Eligible producers are also fully exempt from provincial tax on propane and aviation fuel used for farming. The benefit applies automatically at purchase through authorized dealers.6Alberta.ca. Farm Fuel and Rural Utility Programs
Tax Exempt Fuel User Program
The Tax Exempt Fuel User (TEFU) program lets commercial and government entities (other than the federal government) buy marked fuel without paying the 4-cent provincial tax, as long as the fuel is used in unlicensed equipment or for heating. Individual residents can apply for a TEFU exemption to buy marked fuel for home heating.7Government of Alberta. Tax Exempt Fuel User Registration Instruction Guide Mine operators can also buy tax-exempt propane for use in Alberta mining operations.8Alberta.ca. Fuel Tax – Consumers Fuel bought under TEFU cannot be used in licensed vehicles or equipment.
IFTA for Interprovincial Carriers
Carriers based in Alberta who run commercial vehicles across provincial or international borders need an International Fuel Tax Agreement (IFTA) licence. IFTA lets you file in your home jurisdiction and have the tax distributed to every province or state your vehicles travelled in. A vehicle qualifies if it has two axles and a gross vehicle weight over 11,797 kg (26,000 lbs), three or more axles regardless of weight, or exceeds that 11,797 kg threshold when combined with a trailer. Recreational vehicles are excluded.9Alberta.ca. International Fuel Tax Agreement (IFTA)
IFTA returns are due quarterly, on the last day of the month after each calendar quarter: April 30, July 31, October 31, and January 31. You have to file even if your vehicles never left Alberta that quarter. Late returns bring a penalty of $50 or 10 percent of unpaid taxes, whichever is greater, plus interest until the balance is paid.9Alberta.ca. International Fuel Tax Agreement (IFTA) A detail that catches carriers with farm plates: IFTA-licensed vehicles must burn only clear fuel, even when the carrier would otherwise qualify to buy marked fuel.
If You File Returns for a Business
Businesses registered as direct remitters or fuel sellers file monthly through the TRA Client Self-Service portal (TRACS), using their Alberta Business Identification Number to enroll.10Alberta.ca. TRA Client Self-Service (TRACS) Returns and payments are due by the 28th day of the month after the reporting period, and a return is required for each calendar month even when there was no taxable activity.8Alberta.ca. Fuel Tax – Consumers Payments can be made electronically through the Government Tax Payment and Filing Service at your financial institution.11Alberta.ca. Making Payments to Tax and Revenue Administration Keep records that let you back up every volume and transaction figure on the return, since TRA can audit.